A friend asked me the other day, what does "Beta" mean in the software industry?

I wasn’t really sure what to answer at first. "Beta" used to mean an interim test phase on the way to a "final" and "supported" product release. But over the last five years or so, as we’ve shifted from the boxed-product software world to the online service software world, the term has taken on a very different meaning.

Here’s what Google CEO Eric Schmidt had to say about it in a recent Business Week interview:

How do you make sure all these Google engineering projects actually turn into useful services?

The No. 1 thing we do require is: You can do whatever you want as long as you track it. We have very sophisticated measurement systems at every stage of launch. We have what is called trusted testers. Then beta test, which is forever. We do these 1% launches where we float something out and measure that. We can dice and slice in any way you can possibly fathom.

No real support guarantee, although I doubt . He should know. Pretty much every Google offering has a Beta label on it, with the notable exception of Web search.

So… the new "Beta" means continuous testing, measurement, and improvement. The product is never really "finished", per se… it just evolves. As for support and product quality expectations, it’s much harder these days to get explicit statements or promises from vendors on that sort of thing. Thus "Beta" is also a convenient marketing label to hide behind –  just like it always has been — except that now you can hide forever. (That said, if a so-called Beta service like Gmail went down, you can bet the support would be fast and furious.)

The last point in Schmidt’s answer is also interesting, and to the point on how Google decides whether a service is actually successful:

What’s more important than the absolute number is the relative growth rate. High growth solves virtually all problems. If the growth rate is low, or negative, you’ve got a serious problem.

Test, measure, improve.